Are MFs betting on IT sector ?

IT sector along with Financials and Automobile have been favourites with mutual funds across fund houses. Financials clearly attract maximum investments from the domestic mutual funds with total investments being at Rs 1,14,851 crore with at-least 718 schemes investing in the fund. Automobiles sector has attracted Rs 40,717 crores with almost 675 schemes investing in the sector. 

IT sector as of now has 640 mutual fund schemes investing into the sector. Clearly suggesting IT sector's preference by several portfolio managers. 

The total asset invested in the IT sector by all the fund houses across various schemes put together is Rs 41,870 crores. Post poor results of Infosys and TCS and few other IT companies, it will be interesting to see what decision the portfolio managers will take on their IT holdings. 

What is interesting to note is HDFC Mutual Fund as a fund house has invested maximum in the sector. Out of total investments in the sector HDFC Mutual Fund has invested almost 18.24 per cent followed by ICICI Prudential Mutual Fund, which has invested 16.61 per cent in the sector. UTI Mutual Fund at 9.7 per cent and Reliance Mutual Fund at 9.4 per cent are the other two fund houses that have betted big on the IT sector. 

HDFC Equity Fund -G has invested almost Rs 2,391 crores in IT sector alone. Birla Sun Life India Opportunities Fund -G is the fund which has the highest allocation to IT sector at almost 34.07 per cent being allocated to the sector.

Over a 1 year period the BSE IT index has struggled to generate positive returns. The index has given negative 5 per cent returns over the same period.